How to Set the Best Price for Your Houston Long-Term Rental
It takes both art and science to set the price for a long-term rental in Houston. If you set the price too high, your property might not sell. If you set the price too low, you won’t make as much money and will attract less qualified tenants. Houston property owners need a pricing strategy that takes into account market demand, property features, and long-term financial goals in order to make the most money.
This guide shows you how to set a fair price for your Houston long-term rental that will keep your cash flow steady and your returns high.
Learn about the Houston Long-Term Rental Market
Houston’s rental market is diverse and moves quickly because of job growth, medical facilities, energy companies, and universities. The demand for rentals changes a lot depending on the neighborhood, the type of property, and the type of tenant.
Important things to think about in the market:
- Location and closeness to job centers like the Medical Center, Downtown, and the Energy Corridor
- Rental availability and vacancy rates in the area
- Trends in seasonal demand
- Average number of days similar properties are on the market
The key to setting prices for long-term rentals that make money is knowing what’s going on in the area.
Look at more than just the list prices of similar rental properties
When looking at similar rentals, pay attention to the actual prices that were paid, not just the prices that were advertised. Many listings lower the rent before renting, and those lower rents are important.
Look at properties side by side:
- Size and shape of the room
- How many bedrooms and bathrooms there are
- Age, state, and improvements
- Utilities or amenities that are included
Accurate comps help you keep your rental competitive without charging too much.
Make the Radius Smaller
Prices can change from block to block in Houston. When you can, use comps from the same neighborhood or submarket instead of citywide averages.
Take into account the property’s features and any improvements
There are differences between rentals. When marketed correctly, unique features can make higher rent worth it.
Features that add value are:
- Kitchens and bathrooms that have been updated
- Laundry in the unit
- Space outside that is private
- Parking just for you
- Technology for smart homes
The price of your property should include any features that make life easier or more comfortable for tenants.
Take into account cash flow goals and operating costs
Know Your Numbers
Figure out your monthly costs before you set the rent:
- Payments on a mortgage
- Taxes and insurance on property
- Fixing and keeping things in good shape
- HOA fees, if any
- Costs of managing property
Your rent should easily cover your costs and give you a steady stream of cash.
Plan for Stability in the Long Term
Sometimes, if you charge a little less for a high-quality rental, you can get:
- Faster leasing
- Tenants stay longer
- Costs of turnover are lower
Stable occupancy usually leads to higher net profit over time than trying to get the highest rent.
Change prices based on the type of tenant
Different tenants care about different things. Houston’s long-term rental market has:
- Doctors and nurses, as well as hospital staff
- Companies and employees who move
- Families looking for stable schools
- People who work from home
Homes that are professionally furnished or ready to move into may rent for more, while family-friendly rentals do better with lower prices and longer lease terms.
Use strategic pricing to lower the number of empty units
The biggest threat to making money is having empty space. A higher rental rate may not be worth it if the property is empty for even one month.
Some smart ways to set prices are:
- Pricing just below the peak market to get a faster lease
- Instead of lowering rent, they give longer lease incentives
- Quickly changing the rent if there isn’t much interest
A property that rents out quickly and stays rented is almost always more profitable.
Every year, look over your prices again
Prices for rentals in Houston change every year. Don’t set rent and then forget about it.
When to check prices:
- Leases are renewed
- Changes in the market
- The upgrades to the property are finished
- Costs go up
Annual rent reviews make sure your property stays competitive in the market without making it too expensive for tenants.
Don’t Make Common Pricing Mistakes
Houston landlords often lose money by:
- Using old rental data
- Putting too much value on something because of its price
- Not paying attention to trends in your neighborhood
- Not changing after being empty for a long time
Pricing based on data protects both income and the quality of tenants.
How Home CoHost Helps Houston Landlords Make the Most Money from Rent
To set the right price for a long-term rental, you need to know the area well, do market research, and keep an eye on things. Home CoHost helps Houston property owners set the best rental prices by using real-time market data and information about specific neighborhoods. Home CoHost makes sure that your long-term rental is priced fairly, rented out quickly, and managed well. They do everything from finding tenants and managing leases to coordinating maintenance and keeping an eye on the whole property. Visit homecohost.com to find out more about professional property management and long-term rental help.